Do you remember when The Apprentice came out on NBC with theme song, For the Love of Money by the Ojays? The song started off saying, “Money, money, money, money, money.”
Those lyrics get in your head, and then they stick. The same is true for children, once they learn that as easily as they ask you for money, it will be given to them…It is hard to get that mindset out of their minds once, they are off at college and out of the house. So, how do you tackle teaching your child the importance of money without hindering their enjoyment of childhood moments like going to the fair, an amusement park or overnight class trip? It all begins with the allowance.
Below are a few tips to help you get started:
Deposit, Debit and Balance
With young children 8-10, create a simple “check register” for them. Every week or two weeks that they receive their allowance, have them enter it into their personal register. When they want a special item or toy that is not a part of your budget as the parent, they will have saved money. After the child makes his or her purchase, encourage him or her to record the debit from his or her personal register. At the end of the month or bi-monthly, sit down set aside time for your child to balance his or her register. Putting a check and balance system early in your children’s life will be valuable for them once they have a check account.
Special Field Trips, Overnight Summer Camp and other Outings
Before your children go off on fun trips to the amusement park, field trip, etc; explain how they should budget the lump sum of money you are about to hand them. For example, if your child was going to the fair, Dave Ramsey suggests putting the money into different envelopes such as food, rides and games. With an overnight field trip, you could divide the money into different categories such as food, special souvenirs and emergency money.
When your child is born set up a savings account in his or her name. This is not an account that you will put future tuition money in or something that you as a parent will pull money from. This is simply an account that your child will at one point access. For all of those first few years of birthday checks, times when you have a little extra cash lying around, etc; this is a great place to deposit those items. When your child is old enough to open a checking account, this savings account in most banks can serve as an overdraft protection on your child’s checking account.